PUTRAJAYA: Malaysia's priority must be to ensure good governance before considering new types of taxation, says Prime Minister Datuk Seri Anwar Ibrahim.

"The focus is not taxation. I have always believed that taxation should be secondary in any reasonable public and economic policy initiative.

"We must begin with the governance issue to ensure no unnecessary leakages and corruption.

"You can correct the excesses first, then you can see if there is a necessity to tax further," he said at the Symposium on the Path Towards Greater Prosperity for Malaysia here on Wednesday (Oct 18).

Anwar, who is also Finance Minister, said that discussions regarding Value Added Tax (VAT) and Goods and Services Tax (GST) are relevant, but it should not be forgotten that this country had inherited a significant governance problem, endemic corruption and deficit figures to grapple with.

"It is not because the economy has lost its capacity to grow or the fundamentals are weak – it's how we govern and tolerate this," noted Anwar.

Among the policies to be implemented to address leakages include targeted subsidies.

"I am not anti-ultra-rich, and there is no reason for me to be anti-business. But we are subsidising the rich, so we have decided to stop this," he said.

Anwar spoke about the importance of clarity of policies, namely the New Industrial Master Plan (NIMP) 2030, National Energy Transition Roadmap (NETR) and Mid-Term Review (MTR) of the 12th Malaysia Plan (12MP) as well as political stability were also important to ensure the government could embark on radical policies and reform economy.

On the tax of sugary products, including drinks, he proposed that taxes accrued would be allocated purely for medical treatment of diabetes and treatment for sugar-related diseases and not to the Treasury.